Enterprise Risk Management: a National Risk Management & Insurance Strategy for Sierra Leone

Risk management has been defined as the process- Work in conjunction with ministers, permanent
of identifying and analyzing loss exposures, evaluatingsecretaries and professional heads of departments in
the feasibility of risk management techniques toestablishing an appropriate and effective risk
address the loss exposures, selecting andmanagement system within their ministries to enable
implementing the best techniques and monitoringthem identify risks, analyze risks and mitigate risk
results, in such a manner that any organization orexposures, through loss control measures.
governmental entity can meet its- Provide insurance review of all governmental
objectives---minimization of the adverse effects ofcontracts and agreements for compliance with
accidental losses.appropriate terms and conditions.
 - Provide loss control oversight in all ministries,
It is indeed a truism that the insurance industry candepartments and governmental agencies.
play a very significant and critical role in a nation’s- Protect government owned assets and minimize
developmental process. In most developed andloss to the government and people.
developing countries, insurance and risk managementIt is also aimed at initiating and adding a new
measures and practices have and continue to provideperspective to the wider debate of how a national
the bedrock for a sustained modern socio-economicinsurance and risk management strategy could be
infrastructure in which development and economicutilized in addressing both macro and micro risks and
growth have flourished.loss exposures inherent in all facets and sectors of
In the United States of America for example, riskthe nation’s socio-economic and governance
management and insurance not only permeatesinfrastructure.
every facet of economic and social endeavor, rangingFor an administration composed of insurance
from healthcare to governmental contracting, but isprofessionals in very key strategic positions including
the essential engine driving innovation, development,the President, Minister of Foreign Affairs, Minister of
commerce, investments, governance and societalEmployment and Social Security and Minister of Trade
change.and Industry, the need for establishment of such a
In the Sierra Leonean situation by contrast, the“National Insurance and Risk Management
challenge still remains how insurance professionals andStrategy” must be a no brainier and should as a
governmental policymakers can creatively utilizematter of urgency be seriously considered in other to
enterprise risk management principles and insuranceeffectuate the President’s avowed goal of
techniques in both the public and private sectors to“running the country like a business“.
effectuate the country’s economic developmentThe basic law governing the conduct of Insurance in
and growth.Sierra Leone is the Insurance Act, 2000 which
Through the utilization of enterprise risk managementestablished the Sierra Leone Insurance Commission
principles, governmental entities and organizations are(SLICOM). Pursuant to section 3(1) of the Act, the
provided a systematic rigorous approach to managingcommission is charged with ensuring “effective
risk from all sources that threaten their strategic,administration, supervision, regulation and monitoring
developmental, socio-economic and financialof the business of insurance in Sierra Leone”
objectives.through the performance and exercise of various
 As a Sierra Leonean insurance professional whostatutory functions.
over the decades with every major loss eitherWhile the Sierra Leone Insurance Commission
accidental or by design in the country always(SLICOM) and especially the Commissioner has
retorted that insurance would indemnify the losses,performed a superb job over the years in its
whether it was the burning by the rebels ofregulatory and supervisory functions, the broader
machinery for construction of the Bo/Freetowninsurance industry has however lagged in matching
highway or the destruction of the Sierra Rutilethe potentials of its contributions towards national
Company’s mining infrastructure, culminating indevelopment.
the recent NACSA and SABABU constructionThe Act however does not provide for the kind of
contracts; the realization that our country lacks arisk management and insurance oversight envisaged
national risk management and insurance officeby the establishment of the risk management and
designed to ensure that the country recoupsinsurance office.
indemnification or is held “harmless” in suchAs a result of its inability to innovate and increase its
events is indeed a cause for alarm.capacity and market reach beyond traditional
It is thus against this backdrop that we areinstruments targeting only the formal sector, whose
articulating and advocating the development andcustomers are corporations and wealthy individuals,
establishment in Sierra Leone of a national insurancewith obligatory products such as motor insurance, the
and risk management strategy office designed to:Sierra Leone insurance industry continues failing the
- Serve as a repository of all governmental contractsnation.
and agreements.In conclusion, government contracting personnel
- Provide technical risk management and insurancemake daily business decisions about contract risks,
review of all past, present and future governmentalinsurance, limits, coverage and evaluation of insurance.
contracts and agreements so that government canProviding them with the appropriate tools and
recoup damages from past and current insuranceresources to assist in making these business decisions
contracts.is very important for any nation‘s developmental
- Design and introduce innovative new microaspirations.
insurance products and services.